#FactCheck- Delhi Metro Rail Corporation Price Hike

Introduction

In a business that historically operated in a landscape defined by probability and odds, India’s real-money gaming companies have taken their own legal bet, a gamble that may very well decide whether or not they survive. Play Games24x7, Junglee Games, Sachiko Gaming, and Head Digital Works were in front of India’s highest court on July 14, seeking review of an order that will ultimately decide the fate of these companies.

The Facts

The firms’ review petitions challenge the May 27 ruling in which the Supreme Court also upheld the constitutional legality of the 28% GST on online gaming, paving the way for over 1.5 trillion in back taxes. The petitions, prepared by the Lakshmikumaran & Sridharan law firm, “do not ask to set the entire case all over again” since a review is a technical process usually dealt with by the same bench of judges in their chambers when there’s an error on the record or genuinely fresh material before it before the case may potentially be referred for a new trial in open court if there is something significant in it.

The Genesis of the Legal Battle

To understand why gaming firms are pulling this lever, it helps to revisit what the Court actually decided in May. A bench of Justices J.B. Pardiwala and R. Mahadevan ruled that once a player stakes money on an uncertain outcome, the platform is supplying an "actionable claim" arising from betting and gambling under GST law. The long-cherished distinction between a "game of skill" and a "game of chance", which the industry had used for years to argue it wasn't really gambling, was declared irrelevant the moment cash entered the pot.

Just as consequentially, the Court rejected the industry's central financial argument: that GST should be calculated only on the platform's commission, or gross gaming revenue, rather than on the entire amount players deposit into a contest. The bench sided with tax authorities, ruling that the 28% levy applies to the full face value of every bet. It also found that 2023 amendments to GST law were merely "clarificatory", not the creation of a brand-new tax, a finding that opened the door to retrospective demands stretching back years, rather than only from October 2023 onwards, when the amendments took effect.

The practical fallout was severe. The ruling revived a ₹21,000 crore notice against Gameskraft that the Karnataka High Court had earlier quashed, and it validated roughly 91 show-cause notices issued industry-wide, with estimates of the total exposure ranging as high as ₹1.5–2.5 lakh crore, depending on the source. For context, that figure dwarfs the cumulative revenues several of these companies have ever earned.

The Arguments Now on the Table

The review petitions attack the judgement from several angles. Head Digital Works, the parent of gaming platform A23, argues the case raised substantial constitutional questions that should have gone to a larger Constitution Bench rather than a two-judge bench and that the ruling contains errors serious enough to warrant reconsideration. A recurring theme across the petitions is timing: the companies contend GST should be triggered only when winnings are actually paid out to players, not the moment an entry fee changes hands, and that treating the 2023 amendments as retrospective effectively taxes transactions under a legal framework that didn't yet exist when they occurred. They also argue the ruling creates an unfair mismatch, taxing online games more harshly than comparable offline activity, and in Head Digital Works' filing that the judgement glosses over the industry's long-standing constitutional protection for skill-based businesses under Article 19(1)(g).

A Sector Already on the Ropes

What makes this legal battle unusually high-stakes is that it isn't happening in isolation. In August 2025, Parliament passed the Promotion and Regulation of Online Gaming Act, banning all online real-money games nationwide regardless of whether they involve skill, chance, or a mix of both while carving out room for e-sports and social gaming. That law is itself under constitutional challenge, with hearings before a three-judge bench expected this year. So the same companies fighting a ₹1.5 trillion tax bill for games they used to run are simultaneously fighting for the right to run those games at all going forward. Add to this that GST on the relevant category of actionable claims was separately hiked to 40% in September 2025 as part of a broader rate overhaul, and it's clear the ground has shifted well beyond what the industry anticipated when this dispute began.

What Comes Next

The Supreme Court will first decide whether these petitions clear the threshold for review, a high bar by design, since courts are wary of turning review into a backdoor appeal. If the bench finds no fresh ground, the May 27 judgement becomes final, and companies will be left negotiating settlements, instalment plans, or insolvency proceedings against tax bills that, in several cases, exceed what they've ever earned. If the Court does find merit, it could reopen questions that reshape not just the gaming industry's tax liability but the constitutional line between what states can regulate as "betting and gambling" and what Parliament can tax as a national digital service.

Either way, the outcome will be watched well beyond the gaming world. Any digital business that collects money from users against an uncertain outcome from fantasy sports to prediction markets to certain fintech products has a stake in how the court defines "actionable claim" and how far a "clarificatory" amendment can legally reach into the past. Tax authorities, for their part, will be watching just as closely: a win here reinforces a template they've already begun applying to other sectors accused of restructuring around narrow tax definitions.

There's also an investor angle that tends to get lost in the legal jargon. Real-money gaming in India attracted billions of dollars in foreign investment over the past decade, built on the premise that skill-based games occupied a legitimate, constitutionally protected business category distinct from gambling. Between the May verdict and the PROGA ban, that premise has effectively collapsed within the space of a year. Whether or not the review petitions succeed, the episode is likely to be studied as a cautionary tale about regulatory and tax risk in India's digital economy, a reminder that a business model resting on a legal distinction is only as durable as a court's willingness to keep drawing that line.

Conclusion

The Supreme Court's decision will extend far beyond the gaming industry, shaping India's approach to digital taxation, regulatory certainty, and investor confidence. For now, the ball is back in the Supreme Court's hands, and the industry has staked its remaining legal capital on convincing the same bench that got it here to think again.

Sources

• Online gaming firms move Supreme Court seeking review of verdict upholding 28% GST levy — ANI News
• Promotion and Regulation of Online Gaming Act, 2025 — Wikipedia
• Anti-gambling act targets real-money gaming — Law.asia
• Behind the Ban: The Promotion and Regulation of Online Gaming Act, 2025 — Lexology

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Introduction

Sexual Offences against children have recently come under scrutiny after the decision of the Madras High Court which has ruled that watching and downloading child sexual porn is an inchoate crime. In response, the Supreme Court, on 23 September 2024, ruled that Section 15 of the POCSO and Section 67B of the IT Act penalise any form of use of child pornography, including storing and watching such pornographic content. Along with this, the Supreme Court has further recommended replacing the term “Child Pornography” which it said acts as a misnomer and does not capture the full extent of the crime, with a more inclusive term “Child Sexual Exploitative and Abuse Material” (CESAM). This term would more accurately reflect the reality that these images and videos are not merely pornographic but are records of incidents, where a child has either been sexually exploited and abused or where any abuse of children has been portrayed through any self-generated visual depiction.

Intermediaries cannot claim exemption from Liability U/S 79 

Previously, intermediaries claimed safe harbour by only complying with the requirements stipulated under the  MOU. As per the decision of the SC, now, an intermediary cannot claim exemption from the liability under Section 79 of the IT Act for any third-party information, data, or communication link made available or hosted by it unless due diligence is conducted by it and compliance is made of these provisions of the POCSO Act. This is as per the provisions of Sections 19 and 20 of the POCSO read with Rule 11 of the POCSO Rules which have a mandatory nature.

The due diligence under section 79 of the IT Act includes the removal of child pornographic content and immediate reporting of such content to the concerned police units in the manner specified under the POCSO Act and the Rules. In this way, the Supreme Court has broadened the Interpretation and scope of the ‘Due Diligence’ obligation under section 79 of the IT Act. It was also stated that is to be duly noted that merely because an intermediary complies with the IT Act, will not absolve it of any liability under the POCSO. This is unless it duly complies with the requirements and procedure set out under it, particularly Section 20 of the POCSO Act and Rule 11 of the POCSO Rules.

Bar on Judicial Use of the term ‘Child Porn’

Supreme Court found that the term child pornography can be trivialised as pornography is often seen as a consensual act between adults. Supreme Court emphasised using the term Child Sexual Exploitative and Abuse Material  (CESAM) as it would emphasise the exploitation of children highlight the criminality of the act and shift the focus to a more robust framework to counter these crimes. The Supreme Court also stated that the Union of India should consider amending the POCSO Act to replace the "child pornography" term with "child sexual exploitative and abuse material" (CSEAM). This would reflect more accurately on the reality of such offences. Supreme Court also directed that the term "child pornography" shall not be used in any judicial order or judgment, and instead, the term "CSEAM" should be endorsed.

Curbing CSEAM Content on Social Media Platforms

Social Media Intermediaries and Expert Organisations play an important role in curbing CESAM content. Per the directions of the Apex Court, a need to impart positive age-appropriate sex education to prevent youth from engaging in harmful sexual behaviours, including the distribution, and viewing of CSEAM is important and all stakeholders must engage in proactive measures to counter these offences which are under the umbrella of CSEAM. This should entail promoting age-appropriated and lawful content on social media platforms and social media platforms to ensure compliance with applicable provisions.  

Conclusion 

In light of the Supreme Court’s landmark ruling, it is imperative to acknowledge the pressing necessity of establishing a safer online environment that shields children from exploitation. The shift towards using "Child Sexual Exploitative and Abuse Material" (CSEAM) emphasizes the severity of the crime and the need for a vigilant response. The social media intermediaries must respect their commitment to report and remove exploitive content and must ensure compliance with POCSO and IT regulations. Furthermore, comprehensive, age-appropriate sex education can also be used as a preventive measure, educating young people about the moral and legal ramifications of sexual offences, encouraging respect and awareness and ensuring safer cyberspace. 

References

• https://www.scconline.com/blog/post/2024/09/23/storing-watching-child-pornography-crime-supreme-court-pocso-it-act/#:~:text=Supreme%20Court%3A%20The%20bench%20of,watching%20of%20such%20pornographic%20content
• https://timesofindia.indiatimes.com/india/supreme-court-viewing-child-porn-is-offence-under-pocso-it-acts/articleshow/113613572.cms
• https://bwlegalworld.com/article/dont-use-term-child-pornography-says-sc-urges-parliament-to-amend-pocso-act-534053  
• https://indianexpress.com/article/india/child-pornography-law-pocso-it-supreme-court-9583376/

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Before you take that next sip of your chai latte at Starbucks, you're about to see Artificial Intelligence (AI) in your tea. Yes you heard it right, but relax, you don't need to put the cup down, because  it's not blended in like a new masala and nobody's adding AI as an ingredient. But AI will be deciding how much stock gets ordered, when the machine needs a service call, how the whole backend of your favourite coffee chain runs.

Here's what's actually going on. Starbucks has been quietly building its own AI to replace the systems Oracle, Microsoft, and IBM used to run for it, for the services such as inventory, equipment management, even the point-of-sale software every outlet depends on. In short: Starbucks decided it does not want to outsource its backend anymore. It wants to build the brain itself.

Sounds fascinating on the surface. A coffee company doing its own AI R&D, right? Except dig one layer deeper, and it stops being cool and starts being a conundrum. Here's the actual link: companies like Starbucks are Indian IT's bread and butter. This is literally the business model, global companies pay Indian IT firms like TCS, HCL, Infosys, Wipro to run exactly this kind of backend work: inventory systems, equipment management, point-of-sale software, IT infrastructure. That's what pays the salaries of roughly 6 million people employed by India's outsourcing industry. 

However, recently, this workforce has been shrinking rather than growing. TCS, the largest player in the industry, reported just 0.4 percent revenue growth in the quarter after stripping out currency fluctuations, its slowest expansion in a year, while its workforce shrank by around 3 percent over the past year to about 594,000 employees. At smaller rival HCL Technologies, sales actually slipped 0.5 percent quarter on quarter. Company wide, TCS let go of over 23,000 employees in FY26 alone, citing its pivot toward an AI first services model and reduced bench requirements per client engagement, with a steep net decline of over 11,000 employees in the most recent quarter alone.

AI's impact on India's IT industry and workforce

India's IT sector employs close to 6 million people, and a large share of that workforce has built careers around exactly the kind of work now being absorbed by AI: inventory systems, equipment monitoring, point of sale software, and other repetitive backend operations. As more global clients explore building these capabilities in house, the demand for large teams doing routine maintenance work is likely to shrink. This does not mean mass job losses overnight, but it does suggest a shift in what kind of talent gets hired and retained. Entry level, process driven roles may see slower growth, while demand rises for professionals who can design, audit, and govern AI systems rather than simply maintain legacy software. For India's IT workforce, the challenge is less about competing with AI and more about repositioning around it, moving up the value chain before the shift forces the decision.

Beyond One Coffee Chain ~ The Real Shift in Global Outsourcing

Starbucks isn't an isolated case; it's a visible example of a much wider recalibration. For two decades, the operating assumption in enterprise software was that building complex, mission-critical systems in-house was too slow, too risky, and too expensive compared to buying from established vendors. AI-assisted coding is chipping away at that assumption. What used to require large, specialised engineering teams and years of development can now be prototyped and iterated on far faster enough that even a company whose core business is coffee, not code, can seriously consider building its own enterprise software stack.

However it is also worth noting that this transition isn't frictionless. Starbucks itself had to walk back an AI-powered inventory-counting tool earlier this year after it produced inaccurate counts, reverting stores to manual counting. Building in-house AI systems is not automatically smoother or more reliable than buying proven software; it just shifts the risk and the learning curve onto the company doing the building.

Disruption and Opportunity, Side by Side

None of this means Indian IT companies can afford to sit still. The Starbucks example offers a legitimate signal that repetitive, well defined, automatable work, especially when powered by in house built AI, genuinely poses some risk or not. But it cannot be seen only through the lens of the industry's obituary. It would be premature to call this a broader decline in terms of IT professionals, companies, or jobs.

The same earnings season also brought TCS's expanded AI mandate with ABB and HCL's $1.14 billion AI driven contract in Europe. Demand has not disappeared, it appears to be evolving from routine maintenance work toward AI native, higher value engagement. 

Whether this becomes a meaningful structural shift or simply another cycle the industry eventually absorbs remains to be seen. What seems clear for now is that the path forward depends less on resisting the shift and more on how quickly the industry chooses to embrace it.

Conclusion 

AI is a double-edged sword. While it challenges the old model of outsourcing via a maintenance and staff augmentation play, it also provides new, high-value services opportunities around AI integration, data infrastructure, and governance-areas where the scale, domain expertise, and global delivery experience that Indian IT has amassed over three decades is essential. Whether India's IT majors will move fast enough to upskill, re-skill, and reposition to ride this wave before the opportunity heads somewhere else, is the question to watch, rather than the survival of one vendor or contract.

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Sources

1. Bloomberg Opinion  -  Andy Mukherjee, "You Can't Spell Chai Latte Without AI, and That Will Hurt India.” bloomberg.com/opinion/articles/2026-07-14/you-can-t-spell-chai-latte-without-ai-that-will-hurt-india
2. Yahoo Finance /  Vlad Schepkov, "Starbucks Working on AI Tools to Replace Microsoft and IBM Software – Report," July 9, 2026. finance.yahoo.com/technology/ai/articles/starbucks-working-ai-tools-replace-105954159.html
3. Livemint - Andy Mukherjee, "As Starbucks Mixes AI in Chai Latte, What Must IT Players Do?" Mint Curator.
   livemint.com/opinion/online-views/andy-mukherjee-india-it-industry-starbucks-ai-tc-hcl-tech-artificial-intelligence-oracle-microsoft-ibm-11784118723454.html
4. Metaintro, "TCS and Infosys Face an AI Reckoning" https://www.metaintro.com/blog/tcs-infosys-ai-reckoning-millions-it-jobs-2026
5. LayoffTrends, "IT Layoffs India 2026 — TCS, Infosys, Wipro, GCC Jobs" https://layofftrends.com/india.html
6. NiftyTrader, "Hiring Slows at India's Top IT Firms — Net Headcount Falls in 9MFY26" https://www.niftytrader.in/markets/hiring-slows-at-indias-top-it-firms-net-headcount-falls-in-9mfy26-what-it-signals-for-the-sector/
7. TCS official newsroom, "TCS and ABB Sign Multi-Million, Multi-Year Deal to Transform Global Network Operations with AI," tcs.com/who-we-are/newsroom/press-release/tcs-and-abb-sign-multi-million-multi-year-deal-to-transform-global-network-operations-with-ai

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